An Introduction to Contract Defenses

AuthorFranklin G. Snyder, Mark Edwin Burge
An Introduction to
Where Are We Now? At this point, you have marched through the book far
enough to understand the concepts of formation and consideration. Pretend now that
a contract problem walks into your law office. You plainly find an exchange of
consideration. You plainly have an offer and an acceptance by the appropriate parties.
Under the section we called “Formation,” has a contract been formed? At this point
you might be tempted to think that the answer is yes, but you probably are familiar
enough with the way law school works that the answer is likely to be “maybe.” At this
point, we fairly can say there is a presumption that a contract has been formed, but
that the presumption can be rebutted.
Assume, for example, that A and Banonymous parties for the momentsign
a written agreement under which A agrees to sell B her car for $5,000. We have a
signed agreement, so basic formation issues are not a problem. Also, both cash and
automobiles are things of value that can act as consideration. To decide if a contract
actually was formed, nonetheless, we may have to answer some other questions.
Would it matter, for example, if A was unwilling and B held a gun to her head to
make her sign the agreement? Would it matter that B was only six years old? Or that
A purportedly sold the car while knowing that it had actually been destroyed by a
meteor earlier that morning and was a smoking hunk of melted metal at the time of
the sale?
Enter the Defenses. Your intuition may be that courts would not enforce
agreements in the above situations. But what are the reasons why not? As a matter
of policy, we do not want contract law to reward liars and thugs or to allow children
potentially to be exploited. For reasons such as these, contract law includes the
concept of defenses to formation. If a valid defense exists, no enforceable agreement
exists even though the rules of formation and consideration suggest otherwise. In
earlier times, lawyers generally would call these situations “unenforceable contracts.”
Today, since the definition of contract includes enforceability, an unenforceable
contract is a bit of an oxymoron, so some prefer to say that there is no contract at all.
The terminology may vary, but the effect, no matter what we call it, is that the party
claiming breach cannot recover.
Shifting Burdens of Proof. In contract litigation, the burden of the party
claiming the breach (usually the plaintiff) is to prove the existence of an agreement
and of consideration, where such matters are disputed issues. At that point, the
burden shifts to the alleged breaching party to raise any of the various defenses to
formation. That party will bear the burden of proof on that issue. The plaintiff does
not have to prove he did not brandish a gun; the defendant must prove he did. For
those litigating contract disputes, the burden of proof can be significant.

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